Two council pension funds are eyeing up a near-£300m stake in utility giant Anglian Water.
London Pensions Fund Authority and Lancashire County Pension Fund are using a previously established partnership agreement to put in a bid for a 10 per cent stake in one of Britain’s largest water companies, the Sunday Times reported.
The duo formed the Local Pensions Partnership (LPP) last year in the hope of giving themselves more clout against other institutional investors. LPP has 517,000 members and controls £10bn.
Last month the LPP launched a £1.5bn global infrastructure fund.
Against a backdrop of ultra-low interest rates, utility firms and infrastructure assets have become increasingly popular with financial institutions such as pension funds and insurers. Such investments can provide steady and well-regulated cash-flows, seen as a good fit for paying out member returns.
Ministers have encouraged local authority pension schemes to pool resources enabling them to bid for a raft of Britain’s roads, piping and railway assets.